tax liability

(2) Shareholder’s DISC-related deferred tax liability For purposes of this subsection— (A) In general The term “shareholder’s DISC-related deferred tax liability” means, with respect to any taxable year of a shareholder of a DISC, the excess of— (i) the amount which would be the tax liability of the shareholder for the taxable year if the deferred DISC income of such shareholder for such taxable year were included in gross income as ordinary income, over (ii) the actual amount of the tax liability of such shareholder for such taxable year. Determinations under the preceding sentence shall be made without regard to carrybacks to such taxable year. (B) Adjustments for losses, credits, and other items The Secretary shall prescribe regulations which provide such adjustments— (i) to the accounts of the DISC, and (ii) to the amount of any carryover or carryback of the shareholder, as may be necessary or appropriate in the case of net operating losses, credits, and carryovers, and carrybacks of losses and credits. (C) Tax liability The term “tax liability” means the amount of the tax imposed by this chapter for the taxable year reduced by credits allowable against such tax (other than credits allowable under sections 31 , 32 , and 34 ).